DO I HAVE A CLAIM IF I WAS CHARGED MORE FOR SOMETHING AFTER A WILDFIRE?
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In recent days, story after story has highlighted merchants, landlords, and others attempting to charge more for their goods, services, and accommodations since the start of the wildfires in the Greater Los Angeles area. In the context of accommodations, for example, one news outlet reported that a rental listing nearly doubled in price following the disaster. These developments may lead some to consider protections against what is known as “price gouging.” “Price gouging” is when an individual or business tries to take advantage of consumers by unfairly increasing prices for essential consumer goods and services.
Fortunately, California has enacted robust measures to combat price gouging, including California Penal Code Section 396. In enacting Section 396, the California Legislature declared its intent to “protect citizens from excessive and unjustified increases in the prices charged during or shortly after a declared state of emergency or local emergency for goods and services that are vital and necessary for the health, safety, and welfare of consumers, whether those goods and services are offered or sold in person, in stores, or online.”
Section 396 makes it unlawful for any entity to “sell or offer to sell any consumer food items or goods, goods or services used for emergency cleanup, emergency supplies, medical supplies, home heating oil, building materials, housing, transportation, freight, and store services, or gasoline or other motor fuels for a price of more than 10 percent greater than the price charged by that person for those goods or services immediately prior to the proclamation or declaration of emergency, or prior to a date set in the proclamation or declaration.”
Likewise, as it relates to accommodations, Section 396 makes it “unlawful for an owner or operator of a hotel or motel to increase the hotel or motel’s regular rates, as advertised immediately prior to the proclamation or declaration of emergency, by more than 10 percent.” And the California Legislature extended those proscriptions to landlords, declaring it unlawful “to increase the rental price . . . advertised, offered, or charged for housing, to an existing or prospective tenant, by more than 10 percent.”
The California Legislature also created protections in the realm of residential housing. For example, it is unlawful to “evict any residential tenant of residential housing after the proclamation of a state of emergency . . . or upon the declaration of a local emergency . . . and for a period of 30 days following that proclamation or declaration, or any period that the proclamation or declaration is extended by the applicable authority.” Further, it is illegal to “rent or offer to rent to another person at a rental price greater than the evicted tenant could be charged” under the law.
Importantly, the California Legislature provided an exception to the prohibition on price increases where a “person can prove that the increase in price was directly attributable to additional costs” imposed on it as a result of the natural disaster and where the increase is no more than 10 percent.
Should an individual or business run afoul of those proscriptions, the law makes it “a misdemeanor punishable by imprisonment in a county jail for a period not exceeding one year, by a fine of not more than ten thousand dollars ($10,000), or by both that fine and imprisonment.” Additionally, such violations constitute “an unlawful business practice and an act of unfair competition,” allowing consumers to use California’s consumer protection statutes as recourse. Significantly, the law declares the “remedies and penalties . . . cumulative to each other . . . and the remedies or penalties available under all other [California] laws.”
All in all, price gouging is unlawful in California in the wake of natural disasters like the Greater Los Angeles wildfires. In addition to statewide protections, many cities or counties may provide further protections. Accordingly, Californians who experience price gouging may have a legal claim. Any individual considering legal recourse should consult a qualified attorney who can evaluate the applicable laws, relevant legal developments, and specific facts of a given case.
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